Soondarjee, who resigned in May 2018 as chief financial officer, might have forfeited his bonus, which is housed under the phantom share scheme.

The incredible amounts paid to Dos Santos, Pasley may be the “success fees” for concluding the sale of 40% to Blue Label Telecoms and therefore securing the landmark R13.5-billion recapitalisation of the company.

According to sources, Soondarjee only received about R4 million of this amount, meaning the rest was shared between Dos Santos and Pasley.

The company describes “success fees” as remuneration provided to employees upon successful completion of the recapitalisation transaction.

The remaining balance is paid half-yearly with the last payment due in July 2019, reads Cell C’s filing.

Most of the “success fees” went to the top executives, the finance and regulatory teams.

According to sources, other directors who received big bucks, include Chief Legal Officer Graham Mackinnon, who is alleged to have been paid close to R60 million and the company’s secretary Serenta Lotz. While Managing Executive, Themba Phiri and Joshua Moela, Managing Executive: Government Relations got close to about R20 million each, according to sources.

Asked for comment, Cell C’s spokeswomen requested us to share the company’s financial statements in our possession and we refused to do so, to protect our sources.

She later emailed stating: “The remuneration payable to management and staff that was disclosed in the AFSA 2017, included payments for short term and long term incentives, retention schemes and recapitalization success fees – across all categories of staff.”

That probably makes Cell C the first company ever to be bought, in part, with its own airtime.

Mail & Guardian argued that this also raises questions about the transaction, so much so that Cell C’s own black empowerment shareholders, CellSaf, believe the vast and complicated deal, which has been portrayed as a way to save Cell C from ruinous debt, may, in fact, have amounted to a corporate magic trick.

Furthermore, with the departure of Soondarjee, Pasley and Dos Santos stand a good chance to earn more money if Cell C is listed on the JSE.

Dos Santos currently owns 1.875% of shares in Cell C and Pasley 1.25%.

According to the London Stock Exchange filings, Cell C’s listing is billed for 1 July 2019.

The company has established a share option scheme that entitled staff and key management to participate in the equity of the company’s recapitalisation transaction.

The scheme provided participants with 10% of Cell C’s shares for consideration.

Key management was given 5% of the issued shares at nominal value as part of the recapitalisation.

“Specific key management participate in the retention plan with vesting at the earlier of 30 days after Cell C’s listing date or 1 July 2019,” reads the operators filing.

“Therefore, vesting occurs six months after the post listing date or payment date until 1 January 2023.”

Furthermore, a 25 million ordinary shares were issued to Albanta Trading 109 Proprietary Limited (MS15), a wholly owned subsidiary of the Believe Trust of which Cell C employees are beneficiaries.

But this structure seems suspect and is a front for the few executives at Cell C, says empowerment consortium CellSaf’s report on Cell C: Sixteen Years Of Systematic Disempowerment, seen by TechFinancials.co.za.

CellSaf alleges that: “There are reasons to believe that MS15 or the Employee Believe Trust (EBT) were conceived of as fronts that were designed by Cell C’s white executives without input from black employees”.

Initially, in December 2015 MS15 was to pay R1.5 billion for a 15% stake in Cell C. The purchase price was then increased in October 2016 to R2 billion without explanation.

CellSaf said this was despite the fact that MS15 had failed to raise R1.5 billion for almost a year.

“Cell C would fund the transaction by taking loans of R2 billion from Investec and Rand Merchant Bank. If MS15 failed to pay the R2 billion in 12 months (or raise its own funding for the shares) Cell C would pay R100 for the shares. In a later version of the transaction, EBT would pay R2500 for a 5% stake in Cell C. It would also pay R10 for another 8.82% stake in the company. At the same time, four white executives would pay a nominal fee for a 5% stake in Cell C,” said CellSaf in its complaint.

Meanwhile, Cell C continues to struggle and is losing data customers and the growth of mobile subscribers is slowing.

Its poor performance is negatively impacting the share price of its parent company, Blue Label Telecoms.

Clearly, Cell C is mired in a difficult state and will take a brave face to convince the market that it would be ready to be listed on the JSE in July 2020.

2 COMMENTS

This is so shocking to read! Top executives are being paid huge bonuses when staff is being told not to expect full bonuses but rather more cutbacks; also not forgetting the permanent-temporary staff who have been temping for years without proper pay, benefits or hope of permanent placement within the company?